Is it time for mom and dad’s bank? Financial advice for college students and parents
Between expensive accommodation and a long list of conferences, college expenses add up – and quickly. While investing in your future is exciting, it can be just as daunting.
Whether you’re planning to fund your education or get a helping hand from Mom and Dad’s Bank, there’s a lot of information to consider. You do not know where to start ? We’ve put together the financial advice you need for students – for parents and students.
For the parents
The bottom line
UK universities can charge up to £ 9,250 in tuition – although some charge less, so be sure to check. The cost of living depends on the location; most universities offer an estimate of what students will need.
A Student Finance loan is your friend
All UK students can get full tuition loans from Student Finance, but maintenance loans to cover living expenses and accommodation depend on household income, where you study and for how long. ; the calculator at gov.uk/student-finance-calculator will help you determine what you are entitled to.
Before you rush to pay anything up front, remember that student debt won’t affect your child’s credit rating, and it will go away after 30 years. Your child will only have to pay back a percentage of what they earn beyond a certain threshold, so if you’re not sure they will earn a lot for most of their career, a Student Loan Finance could save both of you money.
“If your household has suffered a loss of income due to the pandemic, you may be entitled to a higher maintenance loan,” says Dr Dominique Thompson, general practitioner and expert in youth mental health who has partnered up at the student accommodation platform, Mystudenthalls. com, to launch a student wellness guide.
See gov.uk/repaying-your-student-loan for more details.
Get off the beaten track
Student Finance is the primary source of funding for universities, but there is a whole world of scholarships out there if you know where to look. “There are also thousands of neglected grants, scholarships and scholarships made available to students and offered each year by universities, private companies and charities. Unlike loans, most of these funds do not need to be repaid. Do your research and check with your university to see what may be available,“ said Dr Thompson.
The Scholarship Hub is a good place to start: thescholarshiphub.org.uk.
Decide what you can donate
Even with all the support available, many students still end up turning to their families for help. Sit down with your child and set a budget. Once you can see what loans and scholarships don’t cover, you can discuss how you might get involved.
Money management 101
College may be your child’s first time managing their own money. Take your child to a grocery store to give them a feel for the prices of things and teach them how to be savvy shoppers. “A cooking rotation is a great way to save money and reduce food waste with someone appointed to prepare a meal for the household each week. Students tend to spend a large portion of their loans on take-out and this method ensures healthy, home-cooked meals every day – with a much healthier price as well, ”says Adam Bullock, UK director of the website. TopCashback money saving.
Don’t forget to share your tips for saving money. “When it comes to the grocery store itself, avoid impulse buying by writing a list and sticking to it. However, it’s always worth visiting the discount aisle at the end of the day. Meat and seafood with yellow stickers can be frozen and used at a later date, ”adds Bullock as food store suggestions.
Don’t be afraid of student debt
Remember that no amount of student debt will stop you from taking out another loan, credit card, or mortgage after you graduate. You will never be asked to repay more than you can.
Do some research
There is no better way to learn how to do something than to receive advice from people who have come before you. Podcasts, blogs, and social media are a great place to start. Asset management firm Schroders Personal Wealth (SPW) has partnered with Heriot-Watt University to produce a series of podcasts to help students take control of their finances. “We hope this podcast series will be the first in a long series and help educate everyone, not just students, and give them the confidence to be fully engaged in their financial lives,” said Donald Gateley , Regional Director for Scotland and Northern Ireland at SPW.
Also, if you have any issues, speak to your university. “UK universities have received funding for student hardship and mental health support and these grants are available directly through your university. Look for “student funding” on your university’s website, ”says Dr. Thompson.
And avoid “pay later” programs. “Too often these are short-term solutions that can have a negative impact in the long term. Missed payments under “pay later” programs can negatively affect your credit score and put you at risk of being contacted by debt collection agencies, which will worsen any financial situation. It’s a ‘slippery slope’ to be avoided at all costs, ”adds Dr Thompson.
If you plan on working part-time, have your resume ready when you move to college and hand it out copiously in your first week. If you already have a job at a large chain, ask your boss if you can transfer to a branch near the university. “Working part-time or freelance will simultaneously help balance current finances and potentially improve employment prospects as well,” says Bullock.
“With a plethora of websites now geared towards remote working, job opportunities are no longer limited to a college town. The tastes of [online talent platforms] UniBeez and Fiverr make it easy to earn a little extra cash and are also safe against Covid. “
Don’t fly away – budget
Digital student financial advisory firm Blackbullion has commissioned a study on the impact of financial well-being on students. It found that 75% of students surveyed were worried about their finances, with 67% saying financial anxiety negatively impacted their mental health.
One way to alleviate financial stress is to figure out your income (loans, savings, and parents) and expenses (travel and living expenses) and, presto, you’ve got a budget. Stick to it by cutting out costly habits like daily coffee and saving money. Experts at the student discount website Student Beans suggest adopting the 50/30/20 rule, an easy way to budget money – 50% of your income should be on necessities, 30% on discretionary spending, and leisure, and at least 20% should be spent on savings. .
When looking for a student bank account, don’t be distracted by the offers of vouchers and gifts. “When choosing an account, check out what each bank specifically offers and decide if it’s right for you,” says Anthony Morrow, co-founder of financial advisory service OpenMoney. “While an interest-free overdraft is a great idea, for example, it’s important to remember that this isn’t just free money and you will need to set up a larger plan for repayments. The goal should always be to pay things off before interest arises. “
Bullock also suggests downloading specific banking apps like Splitwise, Monzo, and Yolt, which can allow students to split bills, rent, and maintenance across different areas, leaving little space for overspending or requiring spending. of overdraft. “It makes sense for students to start budgeting well in college, as it will help pave the way for a financially stable future, even if it means some sacrifices along the way. ”
Also consider opening a savings account. “Saving young is essential, so it’s important to be aware of what you can do to make your money work smarter,” says Jessica Pinkett, Head of Youth Insights at Student Beans.